No cashless makes me penniless; what about you?

These days I've a nightmare: will I or any of my family members fall sick that requires hospitalization? I pray that neither of my family nor any of my friends' family fall sick during these days. All the major health insurance players have removed many of the top (?) hospitals from Delhi, Mumbai, Chennai and Bangalore for cashless transaction. That means, if we get admitted to these hospitals, we've to pay from our pocket and then apply for reimbursements. If we apply for reimbursements, then we're at the mercy of the insurance company. They will invoke some clauses of the policy to partially reject your claim.

Perhaps the intention of the insurance agencies is good. I read that 10% of the hospitals in these cities account for 80%-90% of the claims! Hospitals inflate the bills of the insured patients. There are different categories of rooms in hospitals. Usually the maximum room charge per day is 1% of the sum insured. If you've a mediclaim policy of Rs 3 lakh, then the insurance will pay you only Rs 3000/- per day for the room. If the room charge is Rs 3700, you've to pay Rs 700 extra. But that's only half the story. In all the hospitals, every other charge is proportionate to the room charge. If the doctor charge is Rs 300/- in a general ward, you may to shell out around Rs 1000/- for the same doctor if you're in a room. Similarly, if the some surgery cost is Rs 10,000/- for a patient from a general ward, you may have to pay Rs 30,000/- for the same surgery if you're a patient from a room! I don't understand the rationale behind this at all. How come the same surgery be so costly if you stay in a room whereas the same doctor, same staffs and the same operation theater (OT)  will be used? Suppose your maximum room limit is Rs 3000/- but you stay in a room of Rs 3700/-, then the insurance companies will apply pro-rata calculation on all of your hospital expenses on that ratio. Although your sum insured is enough to cover your total medical bill, you still have to pay from your pocket as your other expenses will be capped as per the maximum room-charge eligibility.

The insurance agencies have defined a Preferred Provider Network (PPN) and defined packaged rates for commonly occurring deseases. The hospitals have been asked to comply with that. The insurance houses want to rein in on the soaring mediclaim expenses. It seems in the long run, we as consumers will benefit. But as the tussle between the insurance agencies and the hospitals are going on, guess who has to bear the brunt? It's us - the policy-holders, the patients. So let's pray that all of us remain healthy till  the clouds of uncertainties over hospitalization are over. Otherwise, no-cashless-hospitalization will leave many of us penniless.

More links:

1. Accept our rates to get cashless plan: Insurers to hospitals, the Times of India, 15th July, 2010.
2. Medical insurance cos shortchange policy-holders seeking reimbursement, the Times of India, 15th July, 2010.